Wallet Watch: Holiday Budgeting and Saving

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If you are like so many other people, every year sometime in December you say something like, “Next year I am going to be better prepared for the holidays.”This is a common statement that is difficult, at best, to manage.Planning can seem like a waste of time, but the truth is that it is quite the opposite.The time we spend planning, if done well, could repay us ten fold in the end.

Before employing any of the tactics, my best recommendation is that you get a binder or set up a holiday folder on your computer to save all of the information as you do it or collect it throughout the year.Your binder or folders should be further divided into categories such as Holiday Card List, Shopping List, Holiday Menus, Holiday Activities, Inspirations, Budget and Savings, etc.Make it plain or embellish it to get you in the spirit, but have a central location to save all things holiday.By doing so, you will save yourself much time, money, and hassle.

savour… happy holidays

Get the rest after the jump…

Holiday Budget Planning

The first topic we will cover is budgeting/saving since it will drive many of the other decisions you make throughout your preparations.To get started, you will need to plan a budget.Calculate your estimated need for the following categories (just the ones that apply):

Cards – If you purchase cards or have them made each year jot down the cost.Be sure to include the postage.$$$ saving tips: 1. Opt for postcards.They are less expensive and so is the postage. 2. Cut down on your list.3. Purchase your cards for next year at the end of the holiday season this year when they are dramatically reduced.

Gifts – This will likely be your greatest expense.Take care to have a real plan in place that you can execute.Also, be sure to factor in the expense of gift wrap.$$$ saving tips: 1. Have a gift list in place. 2. Set limits. 3. Purchase throughout the year and keep track of what you’ve purchased. 4. Find a store that offers lay-a-way.This will keep the gifts out of your house and allow you to spread out payments. 5. Bake your gifts.6. Wrap your gifts in a standard paper such as white or brown craft paper and then wrap bands of event/holiday specific paper around it with coordinating ribbons.

Decorations – This can quickly get out of control with all of the new and shiny things available each year.$$$ saving tips: 1. Take the time to store your decorations carefully so they won’t need to be replaced. 2. Make some things. 3. Buy at the end of the season. 4. Use things found in nature.

Activities – Plan for a little more than you think.Each year we end up at some event we hadn’t expected.Be sure to include ticket prices and parking in your estimate.If you are having your own holiday party it will likely require a separate budget worksheet.

Charity – Factor in all of the gifts and monetary contributions you plan to give each year.For us, this always includes Angel Tree gifts.$$$ saving tips: 1. Make a budget for your Angel Tree recipient and get as much as you can for that amount. 2. Commit to what you wish to give and be careful to not sabotage your budget by giving more to charity than you planned.

Food – This includes baking, special holiday meals, and perhaps your party foods if you are having one and have decided to break it out this way.$$$ saving tips: 1. Buy baking ingredients in bulk.If you have a friend/relative who will also be baking share the expense.

After you have figured the budget, you will need to back into how you will save the money.The longer you wait, the more you will have to save out of each paycheck to get to the goal.After you have the total from your budget divide it by the number of days you have until you need to begin to have it all in your hands.This hopefully will not be December 24th.You will more likely choose a date like December 1 or earlier.

Determine how much you will need to save out of each paycheck based on the dollar per day method.Put that money aside is a savings account or in a sock drawer, but put it aside.Make entries in the budget tab of your binder to keep you inspired to stay on track.Before you know it you will have all the money saved.

Each year Americans charge their Christmas and then hope to pay it off with tax refunds or end of the year bonuses, or worse yet, pay it off over the coming year and pay outrageous amounts in finance charges.By putting a new system in place, you could turn the tables and truly have a happy holiday.Until next time…